First, find the world’s biggest diamonds

A black-and-yellow dump truck rumbles up from a giant pit in the mountains of southern Africa, carrying a load of freshly blasted slate-gray rock from the Letseng mine. With luck it will contain a golf-ball-sized diamond worth perhaps US$20 million (N$294 million).
With even more luck the stone won’t get smashed.
Keeping giant gems intact during the mining process is a challenge for the two companies that account for most of the global production of these multimillion-dollar whoppers. They’ve unearthed 15 of the 20 largest diamonds found in the past decade. Almost every one lost a chunk at some point in the process, including a stone called the Lesedi La Rona that is the largest found in more than a century.
“Since the time of the caveman mining hasn’t changed much. You pulverise the rock and take out what you want,” said Clifford Elphick, CEO of Gem Diamonds, which runs Letseng. “That’s fine in the metals business, but in the diamond business it’s not an appealing technique.”
Gem Diamonds, which operates Letseng in the small kingdom of Lesotho, and Lucara Diamond, which opened its Karowe mine in Botswana in 2012, are in a very different business from De Beers, the world’s biggest producer. With large stones their core business, rather than an unexpected windfall, they’re trying new scanning technologies to reduce accidental breakage.
Back at the mine, Thaabe Letsie watches the truck ascend the opencast pit under a clear winter sky, pauses from directing four drilling machines and says the mining process is a long way from the glamour of the end product.
“Somebody is over there in Hollywood or wherever shining with what I produce,” said Letsie, 43, wearing a scarf beneath his hard hat and a fleece-lined fluorescent yellow jacket to protect him from the zero-degree Celsius temperature and icy winds. “But something has to start somewhere. It’s not pretty work.”
But it’s thorough. The diamond-bearing rock, known as kimberlite, is drilled, blasted with explosives, hoisted and hauled around the mine and plant and crushed repeatedly in order to pry the gems from inside rocks that can be up to a metre square in size. The Letseng mine produces just 1.6 ct of diamond (a carat is 0.2 g) for every 100 t of rock. That means each giant dump truck, on average, hauls out less than a small engagement ring’s worth of gems. By contrast, there are 130 ct a hundred tons at De Beers’ Jwaneng diamond mine, the world’s largest.
The things that make it worth the hunt at Letseng are the sheer size and quality of its stones. Its average value of US$2 299 (N$33 795)/ct is the highest in the industry, according to Gem Diamonds’ earnings released in March. The De Beers diamonds sell for US$207 (N$3043)/ct, on average.
Just last week, prices for the giant stones took a hit when Lesedi La Rona, the massive diamond found by Lucara, failed to sell. It had been tipped to fetch US$86 million (N$1.3 billion), based on prices paid at a sale in May, but the highest bid at the Sotheby’s auction was US$61 million (N$897 million), below the reserve price. The offer was still the second-highest ever for a rough diamond.
The world’s biggest and rarest diamonds have proven more resilient than smaller stones. Prices for rough diamonds slumped 18% last year, the most since the financial crisis in 2008, amid lower demand and an industry-wide credit crunch.
Gem Diamonds resurrected the Letseng mine in 2006 following De Beers, which had closed it in 1982 amid a downturn in diamond prices. Run by ex-De Beers staffers, including Elphick, the company since then has waged a constant battle to reduce the number of large stones it breaks.
“We’ve made important inroads, but we certainly haven’t solved the problem because we’re still using the same basic technology,” said Elphick. “What will solve this is a massive technical breakthrough. That is the holy grail for us.”
Before joining Gem Diamonds, Elphick oversaw the investments of South Africa’s Oppenheimer family, who founded Anglo American in 1917 and transformed De Beers into the world’s biggest diamond producer.

New Scanner
Last year, Gem Diamonds introduced so-called XRT scanners, which can identify loose diamonds from a conveyor belt of rubble and move them to a secure area for processing.
While X-rays have been used to identify diamonds since the 1970s, it’s only in the last few years that computer-processing power has become sophisticated enough to analyse the sheer volume of rubble generated from mining. XRTs are also more adept at picking out the more valuable diamonds because they can analyse stones’ chemical composition rather than simply their ability to reflect light, which is used in the older scanners.
Gem Diamonds is currently considering introducing XRT scanners earlier in the process, before the mined rocks are crushed, to minimise the risk of breaking them, according to Alan Ashworth, who stepped down as chief operating officer last week.
“We suspect there is the odd 1 000-ct diamond contained within the ore body,” he said. “But you never know when the diamond is going to be liberated.”

Broken Stone
The company recovered a dozen diamonds bigger than 100 ct last year, compared with just four in 2012. Still, all its giant gems have had chunks broken off, including a 357-ct rock that sold for US$19.3 million last year, and this century’s third-biggest stone, the 603-ct Lesotho Promise, unearthed in 2006.
Some of those breaks can be fortuitous. Lucara says that had they not broken a 374-ct chunk off their 1 109-ct stone it would have been crushed to pieces in a plant not designed to take such big stones.
“When people say you broke a 1 500 ct diamond, I say we recovered a 1 100 ct diamond,” Lucara CEO William Lamb said.
“The words ‘mining’ and ‘gentle’ don’t go very well together.”

BLOOMBERG